Work on the first phase of the London Array in the Thames Estuary is expected to start later in the year and could be completed by 2012.

The news follows an announcement in the Budget last month that the government would provide extra financial support for offshore wind energy.

In the first phase, 175 turbines will be built - enough to generate up to 630 megawatts of power.

In total the one gigawatt offshore wind farm will comprise 341 turbines spread over 90 square miles and will provide enough energy to power 750,000 homes - a quarter of all those in Greater London.

E.ON is building the wind farm with Denmark's Dong Energy and an Abu Dhabi company, Masdar.

Onshore work is due to start in the summer, with offshore work due to start in early 2011.